YARMOUTH, N.S. – While there is still much to do and sort out before ferry service between Bar Harbor, Maine and Yarmouth, N.S. is finalized, the lease agreement between Bay Ferries and the City of Portland has now expired.

“Our company had an option to continue for the 2019 season in Portland, which was subject to mutual agreement of the parties. That option expired on Dec. 31,” said Mark MacDonald, president and CEO of Bay Ferries. The Cat ferry operated to and from Portland the past three years. “We're very appreciative to the City of Portland who worked with us through the fall and extended the (lease) option date on several occasions on our request."

Jessica Grondin, a spokesperson for the City of Portland, also confirmed the lease expiration in a Jan. 3 email, saying, “The lease has expired with the City of Portland. Future operational questions should be addressed to Bay Ferries.”

Bay Ferrieshas been working with the Town of Bar Harbor to resume ferry service from this port, which the company sailed in and out of from 1997 to 2009. It says it had done so without any provincial government subsidy until the year 2006, when it was asked to also take on the Portland route, which increased the company’s expenses.

Bay Ferries has eyed a return to using Bar Harbor as its American port starting in 2019 to tap into a robust tourism market and to reduce operational costs with a shorter sailing distance and less fuel consumption. Uncertainty over the future availability of Portland as a port was also a factor.

ISSUES TO SORT OUT

But while Bar Harbor town council voted unanimously in October to authorize its town manager to sign a five-year lease agreement with Bay Ferries for ferry service starting in 2019, there have been snags.

The town had to extend the closing date for its own $3.5-million purchase of the ferry terminal property with the State of Maine when then-governor Paul Lepage refused to sign the deed due a change of wording he wanted within the document. The town could not sign the lease agreement with Bay Ferries until it officially owned the property, although the Maine Department of Transportation did approve a right of entry to the ferry company to access the property and start minor work ahead of the town owning the property.

The closing date for the town’s purchase that had been set for Nov. 30 was extended to on or before Jan. 31. Lepage is no longer governor of Maine. The new governor, Janet Mills, was sworn in Jan. 3.

Other outstanding issues are with United States Customs and Border Protection (CBP). CBP says much work is needed to bring the Bar Harbor terminal up to its standards – work Bay Ferries would carry out. It has also asked that Bay Ferries cover the salaries of CBP staff at the Bar Harbor terminal. MacDonald confirmed that both of these things have been requested but wouldn’t comment further when asked if asking Bay Ferries to cover the CBP salaries is an unusual request.

“We have been asked by USCBP to keep the details of our discussions on this issue confidential and we are respecting that request,” he said. “It is not unusual in our business to have to work through difficult financial issues with government authorities and regulators. But ultimately, we have to work together co-operatively and efficiently and do good business, as our company has done with USCBP for many years.”

When it comes to terminal upgrades, Bay Ferries and the province of Nova Scotia would be covering the cost. MacDonald has stated in the past the cost would be around $3 million U.S., although this was not yet a firm figure. Bay Ferries has said staying in Portland would have cost additional dollars as a commitment would have been needed for construction of a new US Customs and Border Protection facility. The likely cost would have been in the $7-8 million range, the company said.

Prior to the 2018 season Bay Ferries and the Province of Nova Scotia spent $1.5 million on customs upgrades in Portland. That purchased equipment is owned by the province.

About moving to Bar Harbor, MacDonald said on Jan. 3, “Our business objectives are basically two-fold: Build volume and stability in the business, which in turn supports the province's economy, and lower the long-term cost of the service to the taxpayer. The move to Bar Harbor is intended to support both objectives.”

In 2018 Bay Ferries transported 50,185 passengers to and from Nova Scotia, an increase of 21 per cent from the year before. In 2017 The Cat carried 41,623 passengers despite having to cancel 25 per cent of its crossings due to an engine issue. In 2016 it transported 35,551 passengers.

“We're attempting to build a sustainable long-term ferry service where we indicate our operating schedule several years in advance to motor coach operators and other customers,” said MacDonald. “There is always uncertainty and there will be challenges but Bar Harbor is the future, and it is best for the ferry service if the future begins now. The Town of Bar Harbor has placed great faith in our company. We look forward to working with them, as we do our other partners on both sides.”

A change of port, of course, will also have to be reflected in marketing carried out by Bay Ferries and Tourism Nova Scotia. Bay Ferries says ideally for an upcoming ferry season marketing would start as early as January or February, although that hasn’t always been possible in recent years. The company is participating in the Boston Globe Travel Show later this month.

Bay Ferries says it maintains ongoing close collaboration with Tourism Nova Scotia and has been in contact with various customers concerning the 2019 service.